- 10-year United States (US) Treasury bond yield stays relatively calm on Monday.
- US Dollar Index posts modest recovery gains below the 99 mark.
- Wall Street looks to open the day in the negative territory.
The USD/JPY pair lost nearly 100 pips last week and started the new week in a quiet manner. As of writing, the pair was trading at 106.85, losing 0.1% on a daily basis.
Last Friday, the labour market data from the United States painted a mixed picture. Although the unemployment rate fell to its lowest level in nearly 50 years at 3.5%, nonfarm payrolls increased less than expected and the annual wage inflation dropped to 2.9%.
The US Dollar Index struggled to gain traction after the data and registered a weekly loss of 0.3% as investors price the expectation of the Federal Reserve cutting the policy rate again in October. According to the CME Group FedWatch, there is an 80% probability of a 25 basis point rate cut at the end of this month.
Market sentiment is likely to drive the pair
Meanwhile, major equity indexes in the United States capitalized on rate cut expectations and posted strong gains on Friday to make it difficult for safe-haven JPY to outperform the Greenback. However, reports of a second whistle-blower coming forward over the weekend with regards to US President Trump’s dealings with Ukraine, Wall Street might start the week on a negative note. At the moment, the S&P 500 Futures is down 0.35% on the day.
There won't be any significant macroeconomic data releases from the US on Monday. Although Federal Open Market Committee (FOMC) Chairman Powell is scheduled to deliver a speech at 17:00 GMT, he is unlikely to comment on the policy outlook.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.